Constructor says payments may be corrupt

A construction company formerly owned by Halliburton, US vice-president Dick Cheney's old firm, has admitted it may have made payments to government officials in a number of countries.

MW Kellogg, based in Greenford, west London, has been investigated by prosecutors in five countries - including the Serious Fraud Office in Britain - concerning allegations of bribes in Nigeria worth $180m (£101m).

It has also now emerged that payments made by the firm in other countries may be improper.

The Nigerian corruption allegations have attracted attention since some of the payments were allegedly made while Cheney was in overall charge of Halliburton, which at that time owned MW Kellogg.

On Wednesday, Jack Stanley, a former colleague of Cheney and one-time director of MW Kellogg, pleaded guilty in the US to paying bribes to Nigerian officials over a nine-year period and faces seven years in prison.

US conglomerate KBR, the main owner of MW Kellogg, has warned it may be barred from bidding for Ministry of Defence contracts if it is convicted of corruption.

Last year, KBR earned £126m from MoD contracts, including an £8bn joint venture to improve facilities at the army's garrisons in Aldershot and around Salisbury Plain.

The British government has faced embarrassing questions because it gave financial backing to MW Kellogg to help it build a gas plant in Nigeria which is at the heart of the bribery allegations. However, Whitehall officials initially declared there was "no suspicion of corruption".

In its financial results, MW Kellogg disclosed it has uncovered information suggesting "plans may have been made by employees of the MW Kellogg company to make payments to government officials in connection with the pursuit of a number of other projects in countries outside of Nigeria". The company added that Halliburton, the owner of MW Kellogg between 1998 and last year, was reviewing "a number of recently discovered documents" relating to middlemen outside Nigeria.

MW Kellogg declined to give further details or name the countries, but said: "The company stands firm in its unwavering commitment to conduct business with the utmost integrity."

The SFO opened a full-scale investigation into the Nigerian allegations in March 2006 and has raided offices and homes in London and Somerset.

Yesterday, the SFO said its investigation continues and that no one has yet been arrested.

The firm added that the US Department of Justice is examining whether a north London lawyer, Jeffrey Tesler, was employed to make improper payments to the Nigerian officials. Tesler has denied wrong-doing.

According to reports in the US yesterday, the Justice Department has extended its investigation beyond Nigeria and is also examining payments involving Stanley and an unnamed consultant, a former MW Kellogg salesperson, relating to contracts in Asia, north Africa and the Middle East.